COZfx: GBP/USD trading lower ahead of BoE meeting

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COZforex: The pound pushed lower against the US dollar on Tuesday, after the release of weak US trade balance data, as investors looked ahead to Thursday’s Bank of England monthly meeting and US data on nonfarm payrolls on Friday.

GBP/USD hit 1.5274 amid US morning trade, the session low; the pair subsequently consolidated at 1.5276, slipping 0.26%. COZ senior foreign exchange risk investment trader Desmond Doyle said, GBP/USD is predicted to find support at 1.5222, and a drop through could take it to the next support line of 1.5129. Meanwhile, the pair is predicted to find its first resistance at 1.5392, and a rose through could take it to the next resistance line of 1.5469.

Sterling remained supported after data showed that construction output in the UK rose to the highest level since October 2012 in May. Markit said the UK construction purchasing managers' index rise to 50.8 in May from 49.4 in April, climbing above the 50 level that separates growth from contraction for the first time in 6 months.

The report said rising construction output could support economic growth in the second quarter but added that the sector was unlikely to contribute to overall employment levels. The data came one day after a report showing that the U.K.’s manufacturing sector grew at its fastest pace in more than a year in May.

In the US, data on Tuesday showed that the US trade deficit widened more-than-expected in April, rising 8.5% to USD40.3 billion. The Commerce Department said US imports rise 2.4% in April to USD227.7 billion, while exports increased 1.2% to USD187.4 billion.

The report came after data on Monday showed that the US manufacturing sector contracted for the first time in 6 months in May.

The data dampened expectations that the Federal Reserve will start to unwind its USD85 billion-a-month asset purchase program later this year.

(COZ forex UK)